Cambridge International A Level · Economics (9708)
5 multiple-choice questions marked as you go, and 4 written questions with worked solutions. All on Utility.
In marginal utility theory, the individual demand curve is derived from the marginal utility curve. If a consumer experiences a decrease in the price of a good, which of the following best describes the process of reaching a new equilibrium position, assuming the marginal utility of money is constant?
Which of the following statements correctly identifies the mathematical relationship between Total Utility (TU) and Marginal Utility (MU)?
A consumer's total utility (TU) for Good X is represented by the function \( TU = 120X - 10X^2 \). If the market price of Good X is \( \$40 \) and the marginal utility of money is constant at \( 1 \), what is the consumer's optimal consumption level of X?
A consumer derives satisfaction from consuming units of a good. The table shows the total utility (\(TU\)) gained at different levels of consumption.
\(\begin{array}{|c|c|}\hline \textbf{Quantity consumed (units)} & \textbf{Total utility (units)} \\ \hline 1 & 14 \\ 2 & 26 \\ 3 & 36 \\ 4 & 44 \\ 5 & 50 \\ \hline \end{array}\)
What is the marginal utility of consuming the \(4\text{th}\) unit of the good?
According to the law of diminishing marginal utility, what occurs as a consumer increases the consumption of a good, ceteris paribus?
Define the law of diminishing marginal utility and explain its effect on a consumer's total utility as consumption of a good increases sequentially.
Write your answer out first, then check it against the worked solution.
Analyze the relationship between the equi-marginal principle and the derivation of an individual's demand curve when the price of one good falls, assuming the Marginal Utility of money remains constant.
Write your answer out first, then check it against the worked solution.
Using the equi-marginal principle, identify the mathematical condition required for a consumer to maximize their total utility when choosing between Good A and Good B with prices \( P_A \) and \( P_B \).
Write your answer out first, then check it against the worked solution.
(a) Define the terms Total Utility and Marginal Utility, and explain the relationship between them.
(b) A consumer derives utility from consuming bars of chocolate. The total utility (\(TU\)) for the first four bars is given as follows: 20, 35, 45, and 50 units respectively. Calculate the marginal utility (\(MU\)) for each additional bar and explain whether this data supports the Law of Diminishing Marginal Utility.
Write your answer out first, then check it against the worked solution.
* The content provided by thinka is generated by AI and may not always be accurate or up-to-date. Please use it as a supplementary resource and verify with official materials.
This page can show you how a good answer looks. It cannot tell you what your answer was missing. thinka marks your written work against the real mark scheme in about 15 seconds.
Want more questions like these? Get a fresh set on this topic, graded as you go.
Practice More